Gender Pay Gap – The Culture Dimension

Last week, on 4th April, we saw the deadline for UK companies with more than 250 employees to report on their gender pay gap. The Economist reported (“XX > XY”, The Economist, 7th April 2018) an average median pay gap of 12%, although certain industries and companies had much larger gaps.

The data reported is blunt – companies must report their employees’ earnings without differentiating between different roles, and must also report the proportion of men and women in each income quartile.

As The Economist rightly reported, the results of this data seem to be driven by two issues. The first is the leaking of female talent out of organisations, resulting in a higher proportion of women in lower-earning quartiles, in more junior roles, compared to the proportion of women in higher-earning, more senior positions in firms. The second is that women are still paid less than men even while doing essentially the same roles.

Regarding talent leakage, there are some standard tropes mentioned by The Economist as potential responses – generous and equal parental leave, more affordable childcare and flexible working hours.

While these measures are necessary and would be beneficial, there seems to be an elephant in the room regarding workplace culture.

Rhian Jones has been banging the drum (appropriately enough) in the music industry press on gender issues for some time now. In her reporting for Music Business Worldwide last week, she noted the 33.8% pay gap across the UK’s three major record labels (Universal, Sony and Warner), and the fact that just 31% of top-quartile earners are women, but also that in the lower ranks the split is pretty much 50:50.

The key challenge for the music industry, as in many others, is keeping those women in the industry as they grow more experienced instead of allowing the leakage to continue.

At Workio, our view is that this is likely to be a cultural problem as much as a logistical one to do with childcare and flexible working. Of course, to us many problems look like cultural ones, as it’s what we are thinking about and working on every day. But go with us on this.

Masha Osherova, Warner Music Group’s EVP of Human Resources, stated in Warner’s gender pay gap report that “We’re attracting more women than men in more junior positions, but we’re not seeing enough of them progress through the organisation to the highest paid, leadership roles.”

This is talent leakage in action.

Warner’s report mentions ‘inclusive culture’ a number of times as a way to retain women as they gain more experience in the organisation, but ‘inclusive culture’ is tough to define. What is clear, as set out by Laura Snapes in The Guardian, among many others, is that in the wake of the #MeToo movement company culture in the music industry has a long way to go before it can truly be called ‘inclusive’.

Peter Drucker famously wrote “If you can’t measure it, you can’t improve it.” It is imperative to improve organisational culture for all sorts of reasons, not least to address the issues arising from the recent gender pay gap data reporting, and the first step to doing so is to get on with measuring it.

We believe that Workio could help with addressing the talent leakage problem. Our data model gathers responses anonymously from employees, asking them neutral questions about the working environment and culture and comparing how things are to how the employee would like them to be.

How things are vs how you’d like them to be

We can then analyse that data to see if men and women are experiencing the same culture but having different responses to it, or even if there are effectively different cultures for each group within the same organisation.

With the ability to see how organisational culture really is for employees, organisations can work to change it over time or can bring in individuals of whatever gender who will gel with the culture as it is. Each of these approaches could improve retention of women in organisations as they gain more experience and rise in seniority, so reducing the gender pay gap over time.

This work will take years, but at long last with the impetus and now the tools to do the work, there is hope for real progress.